Business Reporter

Fairytale without a happy ending: Nathan Tinkler in his brief glory days with one of his mares at the Randwick Race course. Photo: Nic Walker

The fairytale that was Nathan Tinkler's business comeback strategy has been stripped of all credibility after retail billionaire Gerry Harvey announced on Thursday that he will take control of Tinkler's horse racing empire, Patinack Farm.

When Mr Tinkler announced in May that he was selling Patinack to anonymous Middle Eastern interests - lead by UAE-based investment firm Cibola Capital - he made no secret of the fact that the funds were needed for his return to the business where he made his fortune: Coal.

"As I now reside overseas and my focus is on our core operations in resources and mining, I am pleased to secure new owners who will take this project forward. The sale will allow further capital to be used in the development of our existing operations" he said in a statement at the time.

Despite a crumbling coal price, Mr Tinkler explained to the Financial Times in June why the resource cycle, which briefly made him a billionaire, was about to turn again.

He said the election of Narendra Modi in India would spur demand for coal as the government would ramp up its investment in transport infrastructure.

"The long-term believers in the cycle, I think, are starting to move now. China's now got power stations built and has built an amazing amount of infrastructure over the last 10 years," he said.

Unfortunately for Tinkler, the sale of Patinack was already in serious doubt. There was no credible information that Cibola, or its consortium, actually existed. Or, that Patinack actually changed hands when the deal was due to conclude.

A week after the article appeared, Mr Harvey told Fairfax Media he was owed millions and had a caveat over Mr Tinkler's horseracing and breeding assets.

Mr Tinkler later missed the first payments due on the Wilkie Creek purchase which were due at the end of June.

Peabody told Fairfax Media last month that the parties "continue to work towards the milestones set out in our original announcement" and insisted they were currently "on track" with the milestones. But a Plan B was clearly in place. Another resource company, Stanmore Coal, confirmed at that time that it had held discussions with Peabody about acquiring the mine.